Business

On day 1, spectrum auction sees bids worth ₹77,146 crore

The government on Monday received bids worth ₹77,146 crore on the first day of the auction for telecom airwaves, exceeding its own pre-bid estimates of about ₹45,000 crore.

The auctions, taking place after almost five years, saw participation from the three private players — Reliance Jio, Bharti Airtel and Vodafone Idea — who bid for 849.20 MHz on the first day out of a total of 2,308.80 MHz put up for sale.

Airwaves worth ₹3.92 lakh crore have been put up for sale across 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz frequency bands. However, during the four rounds of bidding that took place, no bids were received for the premium 700 MHz band as well as the 2500 MHz band.

While the bidding would continue on Tuesday, it is likely to conclude after another two rounds.

Communications Minister Ravi Shankar Prasad said as of 6 p.m., the winning bids had totalled ₹77,146 crore. “We had anticipated that only three players would participate and they had to renew their spectrum. Our expectation was for bids worth ₹45,000 crore, which has been exceeded. It is a matter of assurance,” Mr. Prasad said.

He added that the auctions were being held in the background of the pandemic that had impacted the entire economy.

“There was stress, we cannot deny that. But, inspite of that, the auctions are showing encouraging results,” he said.

Telecom Secretary Anshu Prakash added that at the end of day 1, of the available spectrum, 65% had been sold in 800 Mhz band, 38% in 900 MHz band, 41% in 1800 Mhz band, 9% in 2100 MHz band, and 89% in 2300 MHz band.

The 2300 MHz band is used primarily to offer 4G service. Since 800 MHz is a more expensive spectrum band, its contribution to the overall revenue is about 50%, while that of 2300 MHz is only about 17%.

“If we exclude 700 Mhz and 2500 Mhz bands, 60% of the spectrum put for auction was sold. It should be noted that in the 2016 auctions, there were seven bidders and the spectrum sold was 41% by quantity and 12% by value of the total spectrum put for auction.

“The corresponding figures in the 2021 spectrum auctions so far is 37% and 19%, respectively, with three participants,” the Minister added.

Stating that the 700 MHz band was a costly band, and priced at about ₹1.97 lakh crore, the Minister said in case the spectrum remained unsold, “the legal requirement is that once there is no auction in a band, the government will have to go to TRAI for a recommendation of fresh price.” The 700 MHz band went unsold during the 2016 auctions.

During the current financial year, the government would get a revenue of ₹12,000-₹13,000 crore, nearly double its expectations of ₹6,000-₹7,000 crore, the Secretary said.

Replying to a query on 5G auction, the Minister said, “We should be coming out with an ecosystem for 5G trials very soon.

“We will be sharing more details at an appropriate time for 5G auctions.” The current auction does not include frequencies in 3,300-3,600 MHz bands that were identified for 5G services.

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Printable version | Apr 21, 2021 11:45:13 PM | https://www.thehindu.com/business/on-day-1-spectrum-auction-sees-bids-worth-77146-crore/article33965876.ece

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